TSMC Commits to $40 Billion Investment of Arizona Fab With 3nm by 2026

TSMC
(Image credit: TSMC)

TSMC on Tuesday is set to formally start installation of tools at its fab near Phoenix, Arizona, an important milestone both for the world's largest contract maker of chips and its clients in the U.S. The company took the opportunity to announce plans to build another phase of its Arizona fab, which will almost quadruple investments into the site and will significantly increase production capacity of the fab.

The second fab at TSMC's Arizona site (or the second phase of the Fab 21, depending  on how you want to look at it) is set to come online in 2026. It will process wafers using TSMC's N3 process technologies, 3nm class nodes that include N3, N3E, N3P, N3S, and N3X. It will also increase production capacity of the camp to 600,000 wafer starts per year, the company announced on Tuesday. It will come online in 2026 and will be one of the foundry's most advanced fabs outside of Taiwan.

(Image credit: TSMC)

TSMC's first fab in Arizona will produce chips using the company's N5 family of technologies — N5, N5P, N4, N4P, and N4X processes — when it comes online in 2024. It will have production capacity of around 20,000 wafer starts per month, or 240,000 wafer starts per year, and will require investments of around $12 billion to be built and equipped.

The new N3-capable production facility will almost quadruple the investment that TSMC will make in Arizona. The chip manufacturer expects its total investments in the state to be around $40 billion when both fabs are built and equipped with production tools, which will make the camp one of the most expensive fabs ever built.

It should be noted that while TSMC's N3 family of production nodes will be extremely advanced even in 2026, that will still be three or four years after TSMC begins to use them in Taiwan. They'll help satisfy the needs of the company's clients, while the foundry's flagship production technology at the time will be N2 (2nm class) with gate-all-around transistors, which will be used to make leading-edge chips in Taiwan. TSMC's crème-de-la-crème nodes will remain in Taiwan, but the foundry will have advanced production capacities in the U.S. as well.

Over time, the company may construct additional modules of its Fab 21, though at present the company has not talked about them as those expansions are a few years out and it's unclear what capacity TSMC's clients are going to need after 2025. Furthermore, both Intel and Samsung will have leading-edge production capacity for their customers in the U.S. by 2025~2026, so that foundry market will be quite different several years down the road.

"When complete, TSMC Arizona aims be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor process technology in the country, enabling next generation high-performance and low-power computing products for years to come," said TSMC Chairman Dr. Mark Liu.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • lmcnabney
    Just like Foxcon in WI, they are just here for the tax subsides.
    Reply
  • Sluggotg
    I am glad to see TSMC continuing to build outside of Taiwan. The Communist Chinese Government could enslave Taiwan at any time. It would be a huge loss to the entire world. (And my TSMC Stock!).
    Reply
  • gg83
    I wonder if it's a deal for the US to protect Taiwan from annexation. Or whatever China wants to do.
    Reply
  • Elusive Ruse
    Chip Act working well it seems, TSMC gets tax exemptions and avoids the CCP's shadow while US gets jobs and maybe cheaper advanced chips for the tech industry?
    Reply
  • 2+2
    lmcnabney said:
    Just like Foxcon in WI, they are just here for the tax subsides.
    I don't think so.
    They started building in the US before the subsidy.
    Reply
  • TJ Hooker
    2+2 said:
    I don't think so.
    They started building in the US before the subsidy.
    Yes and no. They did announce a planned ~$12B Arizona fab in 2020, before any major subsidies were announced AFAIK (or at least any federal ones), but they massively increased their plans once the CHIPS act came into the picture. And implied that the scope and speed of that expansion hinged on the CHIPs act being passed.

    https://www.reuters.com/technology/exclusive-tsmc-looks-double-down-us-chip-factories-talks-europe-falter-2021-05-14/https://www.washingtonpost.com/us-policy/2022/06/28/tsmc-arizona-construction-subsidies/
    Reply
  • A Stoner
    Am I reading the charts right, that Arizona will get old technology in 2026? Arizona will get N3 tech a year after N2 tech launches.
    Reply
  • Geef
    A Stoner said:
    Am I reading the charts right, that Arizona will get old technology in 2026? Arizona will get N3 tech a year after N2 tech launches.

    It won't matter since the newest gen chips aren't the only thing getting produced. Anyway once the N3 tech hardware is in place it won't be set in stone to only do N3. They will continually upgrade/expand the location most likely. Having their physical locations spread around the world helps TSMC from being forced by 'certain' governments to do their bidding.
    Reply
  • btmedic04
    Happy to see it, but this definitely feels like a "just in case Taiwan ceases to exist as a sovereign entity" type move to ensure the future survival of TSMC
    Reply
  • Amdlova
    China invades Taiwan 2026 - 2027
    Reply